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LPL Financial (LPLA)
NASDAQ:LPLA
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LPL Financial (LPLA) AI Stock Analysis

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LPLA

LPL Financial

(NASDAQ:LPLA)

Rating:66Neutral
Price Target:
$390.00
â–²(6.18% Upside)
LPL Financial's overall stock score is driven by strong earnings call performance and strategic acquisitions, which bolster growth prospects. However, financial performance concerns, particularly in cash flow, and technical indicators suggest caution. The valuation is moderate, with limited dividend yield.
Positive Factors
Client Asset Growth
Client asset growth was 28% from strong market gains, industry-leading recruiting, and recent deals.
Earnings
LPL continued its long record of beats, with adjusted EPS driven by lower expenses.
Long-term Growth
There is a constructive long-term growth outlook due to strong recruiting trends and potential expansion opportunities.
Negative Factors
Client Cash Levels
May's client cash balance is below consensus's estimate for the quarter.
Competition
There is potential for increased competition for financial advisor recruiting.
Near-term Catalysts
There are limited near-term catalysts as LPL Financial works through the acquisition and integration of Commonwealth.

LPL Financial (LPLA) vs. SPDR S&P 500 ETF (SPY)

LPL Financial Business Overview & Revenue Model

Company DescriptionLPL Financial Holdings Inc., together with its subsidiaries, provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at financial institutions in the United States. Its brokerage offerings include variable and fixed annuities, mutual funds, equities, retirement and education savings plans, fixed income, and insurance, as well as alternative investments, such as non-traded real estate investment trusts and auction rate notes. The company also provides advisory platforms that provide access to mutual funds, exchange-traded funds, stocks, bonds, certain option strategies, unit investment trusts, and institutional money managers and no-load multi-manager variable annuities. In addition, it offers money market programs; and retirement solutions for commission-and fee-based services that allow advisors to provide brokerage services, consultation, and advice to retirement plan sponsors. Further, the company provides other services comprising tools and services that enable advisors to maintain and grow their practices; trust, investment management oversight, and custodial services to trusts for estates and families, as well as insurance brokerage general agency services; and technology products, such as proposal generation, investment analytics, and portfolio modeling. The company was formerly known as LPL Investment Holdings Inc. and changed its name to LPL Financial Holdings Inc. in June 2012. LPL Financial Holdings Inc. was founded in 1989 and is based in San Diego, California.
How the Company Makes MoneyLPL Financial generates revenue primarily through several key streams: advisory fees, commission revenue, and asset management fees. The company charges fees for its advisory services, which are based on the assets under management (AUM) and are typically a percentage of the investments managed. Additionally, LPL earns commissions from the sale of investment products, such as mutual funds and insurance, when financial advisors facilitate transactions on behalf of their clients. The firm also generates income from its technology and operational services provided to advisors, as well as from interest on cash balances held in client accounts. Significant partnerships with product providers and a growing advisor network further enhance LPL's revenue potential, as they expand the range of investment options available to advisors and increase overall client engagement.

LPL Financial Key Performance Indicators (KPIs)

Any
Any
Net New Assets
Net New Assets
Measures the flow of new client assets, indicating the firm's ability to attract and retain clients, a key driver of future revenue.
Chart InsightsLPL Financial's net new assets have shown significant volatility, with a notable spike in Q4 2024, driven by strategic acquisitions and strong organic growth. The latest earnings call highlights a robust financial performance, with record total assets and a 5% annualized growth rate in net new assets. Despite challenges like higher interest expenses and reduced trading volumes, LPL's successful acquisition strategies and high asset retention rate position it well for continued growth, although macroeconomic uncertainties may temper adviser movement and organic growth in the near term.
Data provided by:Main Street Data

LPL Financial Earnings Call Summary

Earnings Call Date:Jul 31, 2025
(Q2-2025)
|
% Change Since: -7.11%|
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance with record total assets and successful recruitment and asset growth. Despite some challenges in adviser movement and cash balance decline, the company demonstrated efficient cost management and high asset retention. Overall, the positive aspects outweigh the negative trends.
Q2-2025 Updates
Positive Updates
Record Total Assets
Total assets increased to a record $1.9 trillion, with organic net new assets of $21 billion, representing a 5% annualized growth rate.
Strong Financial Performance
Adjusted EPS increased by 16% from a year ago to $4.51, and the adjusted pretax margin was approximately 38%.
Successful Recruitment and Asset Growth
Recruited assets in Q2 were $18 billion, contributing to $161 billion over the trailing 12 months, with industry-leading capture rates of advisers in motion.
High Asset Retention
Achieved industry-leading asset retention at 98% for the second quarter and over the last 12 months.
Efficient Cost Management
Core G&A was $426 million in Q2, below the outlook range, leading to lowered 2025 expense outlook.
Negative Updates
Challenges in Adviser Movement
Observed a truncation in adviser movement due to macroeconomic uncertainty, with expected retention rate of 90% for Commonwealth advisers.
Cash Balance Decline
Overall client cash balances ended the quarter at $51 billion, down $2 billion sequentially due to net buying activity.
Regulatory Ambiguity Impacting RIA Segment
Ambiguity around regulatory environment led to a slowdown in movement into independent RIAs.
Company Guidance
During the second quarter of fiscal year 2025, LPL Financial Holdings Inc. reported strong financial performance and strategic advancements. The company achieved a record total asset level of $1.9 trillion, with organic net new assets reaching $21 billion, representing a 5% annualized growth rate. Adjusted EPS increased by 16% year-over-year to $4.51, driven by organic growth and expense discipline, leading to an adjusted pretax margin of approximately 38%. Recruited assets totaled $18 billion for the quarter, contributing to $161 billion over the trailing 12 months. Asset retention remained industry-leading at 98%. The acquisition of Commonwealth Financial Network is set to close, with expectations to onboard assets by Q4 2026 and achieve a 90% retention target. The company also completed the conversion of Atria Wealth Solutions with anticipated asset retention of approximately 82%, exceeding the initial target. Additionally, LPL Financial's core G&A expenses for 2025 are projected between $1.880 billion and $1.920 billion, inclusive of acquisitions.

LPL Financial Financial Statement Overview

Summary
LPL Financial shows strong revenue growth and improved cost management, with a high gross profit margin. However, the decline in net profit margin and cash flow performance, particularly the significant drop in free cash flow growth, are concerns. The balance sheet indicates reduced leverage but a decline in return on equity.
Income Statement
75
Positive
LPL Financial has demonstrated consistent revenue growth, with a TTM revenue growth rate of 6.83%. The gross profit margin has improved significantly to 62.50% in the TTM period, indicating strong cost management. However, the net profit margin has decreased slightly to 7.91%, suggesting rising expenses or other financial pressures. Overall, the company shows a solid performance in revenue generation and profitability, though there is room for improvement in net profit margins.
Balance Sheet
68
Positive
The company's debt-to-equity ratio has improved to 1.45 in the TTM period, indicating a reduction in leverage compared to previous years. However, the return on equity has decreased to 32.17%, which, while still strong, reflects a decline from previous periods. The equity ratio stands at 29.03%, suggesting a moderate level of financial stability. Overall, the balance sheet shows a positive trend in reducing leverage, but the decline in ROE is a concern.
Cash Flow
55
Neutral
LPL Financial's cash flow performance is mixed, with a significant decline in free cash flow growth rate to -98.55% in the TTM period. The operating cash flow to net income ratio is relatively low at 0.16, indicating potential challenges in converting earnings into cash. The free cash flow to net income ratio is negative, reflecting cash flow constraints. While the company has shown strong operating cash flow in the past, recent trends suggest potential liquidity issues.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue14.13B12.39B10.05B8.60B7.72B5.87B
Gross Profit8.83B3.37B3.05B2.37B7.62B5.77B
EBITDA2.50B2.11B1.99B1.53B1.04B908.93M
Net Income1.12B1.06B1.07B845.70M459.87M472.64M
Balance Sheet
Total Assets17.47B13.32B10.39B9.48B7.99B6.60B
Cash, Cash Equivalents and Short-Term Investments4.31B1.01B541.76M884.28M514.92M818.36M
Total Debt7.34B5.75B3.96B2.95B3.05B2.59B
Total Liabilities12.40B10.39B8.31B7.31B6.32B5.28B
Stockholders Equity5.07B2.93B2.08B2.17B1.67B1.31B
Cash Flow
Free Cash Flow-5.38M-284.94M109.33M1.64B237.15M634.41M
Operating Cash Flow563.67M277.59M512.61M1.95B453.13M789.94M
Investing Cash Flow-1.67B-1.59B-860.19M-376.40M-458.64M-187.50M
Financing Cash Flow4.06B1.42B-208.53M-504.27M278.84M-275.19M

LPL Financial Technical Analysis

Technical Analysis Sentiment
Positive
Last Price367.30
Price Trends
50DMA
372.44
Negative
100DMA
359.36
Positive
200DMA
348.55
Positive
Market Momentum
MACD
-4.31
Negative
RSI
50.24
Neutral
STOCH
67.81
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LPLA, the sentiment is Positive. The current price of 367.3 is below the 20-day moving average (MA) of 367.33, below the 50-day MA of 372.44, and above the 200-day MA of 348.55, indicating a neutral trend. The MACD of -4.31 indicates Negative momentum. The RSI at 50.24 is Neutral, neither overbought nor oversold. The STOCH value of 67.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LPLA.

LPL Financial Risk Analysis

LPL Financial disclosed 32 risk factors in its most recent earnings report. LPL Financial reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

LPL Financial Peers Comparison

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$27.94B32.7319.15%0.42%12.30%20.76%
75
Outperform
$33.08B16.2218.16%1.16%9.42%14.86%
74
Outperform
$174.61B25.8015.59%1.09%4.64%54.26%
74
Outperform
$11.76B22.1111.11%1.52%8.76%10.32%
73
Outperform
$29.84B49.339.51%0.35%27.97%28.39%
68
Neutral
$17.69B11.8210.30%3.73%9.66%0.42%
66
Neutral
$28.84B24.7929.46%0.33%29.23%13.45%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
LPLA
LPL Financial
367.30
147.18
66.86%
IBKR
Interactive Brokers
63.30
31.91
101.66%
RJF
Raymond James Financial
167.96
51.72
44.49%
SF
Stifel Financial
116.00
30.84
36.21%
SCHW
Charles Schwab
97.24
34.07
53.93%
TW
Tradeweb Markets
126.77
10.69
9.21%

LPL Financial Corporate Events

M&A TransactionsBusiness Operations and Strategy
LPL Financial Completes Acquisition of Commonwealth Financial
Positive
Aug 1, 2025

On August 1, 2025, LPL Financial Holdings Inc. completed its acquisition of Commonwealth Financial Network, a wealth management firm with around 3,000 advisors managing $305 billion in assets. This acquisition, initially announced on March 31, 2025, is expected to enhance LPL’s service offerings and market position by integrating Commonwealth’s premium service culture and award-winning advisor experience. Commonwealth will continue to operate as a wholly-owned portfolio company, with its CEO Wayne Bloom joining LPL’s management committee. The onboarding of Commonwealth advisors to LPL’s platform is anticipated to be completed by the fourth quarter of 2026.

Executive/Board ChangesBusiness Operations and Strategy
LPL Financial Signs Consulting Agreement with Althea Brown
Neutral
Jul 3, 2025

On May 3, 2025, Althea Brown resigned as the Chief Legal Officer and Corporate Secretary of LPL Financial Holdings Inc. Subsequently, on July 2, 2025, the company entered into a Consulting Agreement with her to assist in the transition of her responsibilities until September 20, 2025. The agreement waives her obligation to repay approximately $270,000 related to her sign-on bonus and relocation expenses, and allows her restricted stock units to continue vesting. This move ensures a smooth transition and maintains stability within the company’s legal operations.

Executive/Board Changes
LPL Financial’s Chief Legal Officer Resigns
Neutral
Jun 3, 2025

On May 30, 2025, Althea Brown announced her resignation as the Chief Legal Officer and Corporate Secretary of LPL Financial Holdings Inc., effective June 30, 2025. After 28 years in executive roles, she plans to take a career break. Ms. Brown will assist in developing a transition plan as the company searches for her successor, potentially impacting the company’s legal and corporate governance operations.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 22, 2025